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Managed Care Under Siege

Author

Epstein, Richard A.

Bibliographic Citation

Journal of Medicine and Philosophy. 1999 Oct; 24(5): 434-460.

Abstract

Managed Care Organizations (MCOs) are frequently criticized for their
marketing mistakes. Often that criticism is leveled against an implicit
benchmark of an ideal competitive market or an ideal system of government
provision. But any accurate assessment in the choice of health care
organizations always requires a comparative measure of error rates. These are
high in the provision of health care, given the inherent uncertainties in both
the cost and effectiveness of treatment. But the continuous and rapid
evolution of private health care mechanisms is, in the absence of regulation,
more likely to secure access and contain costs than any system of government
regulation. State regulation is subject to the risk of capture and to the
sluggish and acquisitive behavior of state run monopolies. The proposed fixes
for the MCOs (rights to specialists, access to physicians outside the network,
guaranteed emergency room access) are likely, when imposed from without, to
cost more than they are worth. The long-term risk is that markets will fail
under regulation, paving the way for greater losses from massive government
control of the health care delivery system.